Will 2010s Be the Demise of Hispanic Groceries Stores?

For the last 40 years, many independent grocery stores like Rancho Liborio in California, Sedano’s in Florida and Fiesta Mart in Texas have grown in parallel with the Hispanic population in each market. These grocery stores have become the preferred store for Hispanics, particularly among unacculturated Hispanics.

A first generation immigrant from Venezuela, Rodolfo Avila, mentioned that stepping into Harvest Time Foods in Chicago is like stepping back into a store from his native country. “When you walk into the store, the aroma of the bread being baked in the oven rekindles memories of waking up at my mom’s house, who lived near a bakery. But it is all the food: such as mangoes, passion fruit and plantain that allows you to feel like you are back at home,” said Rodolfo.

Many of the independent groceries stores catering to the Hispanic community from Mexican descent were able to capitalize on the emotional connections by manipulating the sensory system. As Hispanic consumers enter the store, they would observe a store full of bright and bold colors, piñatas, and staff with similar appearance; they would hear boleros or ranchera music interrupted by the Spanish announcement over the intercom; they could touch the shaved thorns of the nopales; rejoice on the scent of fresh and warm tortillas, or taste a flavorful carnitas torta and have a fresh squeezed orange juice.

However, in the past five to ten years, both regional and national food retailers like Publix, Safeway and Wal-Mart have been catering to Hispanics more aggressively. Some of these retailers have expanded their ethnic isles and product offerings to include fresh tortillas, corn husks for tamales and queso fresco, while for example some CPGs (consumer packaged goods) increase their flavor profiles to include jalapeño flavor chips, dulce de leche ice cream and Mint Mojito gum.
General market stores are getting savvier at targeting Hispanics. “With the right help, most stores, if not all, would be able to crack the code” said James Legg, Executive Vice President for The San Jose Group. The flair of Hispanic grocery stores will continue to lose ground against mainstream grocery stores and with more non-Hispanics increasing their appetite and likeness for Latin cuisine, it will be a matter of time when the “Mexican food” will drop off the label of “Mexican” and it will just be “food”, similar to “Italian food” dropping the Italian label and becoming the following: pasta, tomato sauce and pizza.

As the differentiation line between Hispanic and general market stores becomes nebulous by offering the same products at both stores, the need for Hispanics or anyone else looking to buy Hispanic produce and products at a specialty store will soon be eliminated. Consequently, smaller independent grocery stores catering to Hispanics would be forced to compete with larger regional and national grocery stores through price, convenience, service and innovation.

“An excellent example of innovation would be Fiesta Foods in Washington that successfully introduced jalapeño, chipotle, spinach and tomato flavored tortillas, which captured the attention of both Hispanics and non-Hispanics alike” mentioned Legg. “These initiatives would put a grocery store on the map and would increase the likelihood for store preference instead of the same in-store festivals that are duplicated throughout the year across different Hispanic or General Market grocery stores.”

With the 2010 U.S. Census Bureau releasing U.S. population counts in December of this year. The interest to target one of the fastest growing population groups will resurface.

However, one of the most important factors for groceries stores to consider is that Hispanic growth is being driven by U.S. born latinos, and therefore, the emotional connections that existed among the unacculturated Hispanics and past marketing initiatives would not be as effective as they used to be.

One must look into developing an emotional connection with the Nuevo Latino, referring to those Hispanic individuals who are bilingual and bicultural. The Nuevo Latinos are not confined into one or the other, but live in both worlds simultaneously.